AKD STOCK SMART, Jul 20, 2018
StockSmart
Weekly Review
Reeling on political crisis (further intensified by the arrest of Nawaz Sharif and his daughter), market opened the week on a negative note, plunging 605pts on its first trading session. However, fresh liquidity deployed by local AMCs rendered the much-needed support, with KSE-100 index closing the week at 41,222pts (up 951pts/2.36%WoW). Steel and cements garnered investors’ interest, as the respective sector increased retail prices passing on rupee depreciation impact. Trading activity at the bourse substantially improved during the week, with avg. daily turnover increasing to 219.46mn shares (up 67.92%WoW). Key news flows impacting the market were: 1) Current account deficit for FY18 reached record levels of US$18.0bn, reflecting a growth of 42.6%YoY from US$12.6bn in FY17, while GoP financed the external imbalance through US$11.4bn borrowings, 2) Rupee further lost 5.4% against Greenback on Monday, with PKR/US$ parity closing the week at PkR128.5, 3) Total FX reserves declined by US$402mn, ending at US$15.7bn while central bank reserves plunged 4.4%WoW to record at US$9.1bn (implying import cover of 1.9 months), 4) SBP withdrew advance payment facility for importers and imposed 100% cash margin requirement on non-essential items, 5) FBR has allowed sales tax adjustment paid at customs clearance stage by steel melters on import of raw materials including various categories of remeltable iron and steel scrap. Performance wise, UBL (+10.59%WoW), MLCF (+9.67%WoW), NCL (+8.89%WoW) and ASTL (+8.89%WoW) were major gainers in our AKD Universe, while laggards included: 1) NBP (-3.20%WoW), 2) PSMC (-1.91%WoW), 3) FFBL (-1.57%WoW and 4) GWLC (-1.39%WoW). Foreigners continued to offload equity stakes during the week, with net outflow of US$22.1mn compared to net outflow of US$26.63mn in the previous week.
Outlook
With the country heading to General Elections 2018 (scheduled on Jul 25’18), political euphoria once again likely to dominate in the week ahead. In this regard, market activity could switch gear down, with investors staying on sidelines till election results. Post-election, market will react positively to strong mandate irrespective of which political party (PML-N or PTI) takes the lead.
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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